PwC's US Tariff Industry Analysis under incoming Trump administration

January 2025

In brief

What happened?

The Trump administration has laid out an activist trade policy agenda focused on increasing US tariffs. This strategy aims to reshape US trade relations, promote fair trade practices, address socioeconomic issues, and encourage domestic manufacturing. However, this approach may also lead to considerable disruption and uncertainty for US importers and multinationals.   

Since the November elections, President-elect Trump has focused his announced tariff actions on key trading partners including China, Mexico, and Canada, suggesting trade policy actions affecting imports from these countries could be implemented as early as the first day of his new term. The Trump administration has unveiled a tariff agenda with rates that would be an escalation from current trade norms. Key proposals include a:  

  • 60%+ tariff on all Chinese-origin products
  • 100% to 200% tariff on vehicles imported from Mexico  
  • 25% tariff on all imports from Mexico and Canada  
  • 10% to 20% tariff on all rest-of-world (ROW) imports (not already covered above)  

Why is it relevant?

The potential Trump tariff policies significantly expand the scope of products, industries, and countries subject to punitive tariffs compared to previous administrations. Barring carve-outs or a new exclusions process, even Chinese goods that were previously exempt from punitive tariffs would be impacted by the new Trump tariff proposals. Importers and purchasers across all sectors must therefore assess the potential impacts of these new policies on a go-forward basis.  

To illustrate how impactful these tariffs might be, PwC prepared a US Tariff Industry Analysis using 12 months (October 2023 to October 2024) of US Census data along with Trump’s announced pre-inauguration tariffs. The data reflects that the proposed tariff measures could increase tariff revenues from $81 billion a year to nearly $900 billion a year, although that figure does not take into account countermeasures that trading partners may impose in reaction to US policy changes. The Census Bureau breaks out this impact across different buckets which are effectively categorized as “Dutiable” and “Non-dutiable” goods. “Dutiable” goods are those imports upon which duty was paid (e.g., pursuant to the relevant tariff classification and inclusive of Most-Favored Nation duties, special or punitive measures, etc.). “Non-dutiable” goods are those imports that entered without payment of duty (e.g., conditionally duty-free goods, goods entered under a special program or Free Trade Agreement (FTA)/exemption, etc.). For discussion purposes, PwC uses the breakout of “Dutiable” and “Non-dutiable” goods throughout this publication.  

Of the $3.3 trillion worth of goods imported each year, the largest impact would be to goods that fall under the “Non-dutiable” goods category, encompassing nearly $2.3 trillion of goods. Tariffs on this category could go from zero to over $550 billion annually. From an industry perspective, the hardest hit sectors would be motor vehicles, pharmaceuticals and medicines, computer and communication equipment, and oil & gas. These industries, which rely heavily on imports, would face an immediate impact with additional tariff costs, increased consumer prices, and overall margin erosion across companies at large.  Follow-on impacts may include potential changes to a company’s overall supply chains including alternative materials sourcing strategies or even alternative manufacturing locations.   

Action to consider

Each multinational corporation, including those not currently subject to tariffs, must assess the pre/post impact of the potential tariffs on its earnings per share and overall shareholder returns. It is crucial for companies to model the changes to have data-driven insights that inform strategic decisions moving forward. Additionally, as certain industries have historically been subject to predominantly low or duty-free rates, companies in these industries should consider whether existing trade, logistics and sourcing operations and regulatory controls should be enhanced to address the changing risk profiles associated with the new tariffs.

Contact us

Ed Geils

Ed Geils

Global and US Tax Knowledge Management Leader, PwC US

Follow us